Month: October 2016

The World Bank is removing the term “developing countries” from its terminology—and about time too. The term obscures more than it reveals, encompassing a wide swath of countries from Argentina and Chile to Russia, most of sub-Saharan Africa, and (until recently) India. These countries may not be “rich”, but that doesn’t mean they have much in common. Therefore removing the term, and hopefully replacing it with better-tailored specific categories based on the Human Development Index and the structure of the economy, is a positive step.

However, there is another side to this coin: the so-called “developed countries”. This is a term that has come into common use over the last 30–40 years to describe rich, industrial or now post-industrial countries, and it’s even worse than “developing countries”. While it may describe a group of countries that are somewhat more similar than the “developing countries”, as a term it is far worse. It supposes that there is some definite endpoint to economic development—an industrial or post-industrial economic structure.

We have no evidence to support this supposition; further, it is arrogant to assume that some countries have ascended to the highest plane of economic development. To be sure, life in the “developed” countries is far better than it was 200 years ago (if you don’t believe me, go and read up on pre-industrial living standards—I hope you like oats), but we have no reason to assume that development will stop now. Let’s have some humility and intellectual honesty. Instead of “developed countries”, we should use terms that more accurately describe the economies that we are grouping together: “small, open economies”, “finance-led economies”, “export-led economies”, “domestic retail and service-led economies”, for example. Smarter people than me can come up with neater terminology and better categories, but that’s the direction we should be heading.